ABC, Tapper and Other Media Figures Join in Distorting Small Business Tax Falsehood
Summary: ABC News' Jake Tapper, CNN's Dana Bash, and Fox News' Sean Hannity advanced the falsehood that President Obama's plan to allow the Bush tax cuts to expire for wealthy taxpayers would cause a large percentage of small businesses to pay higher taxes. In fact, according to the Tax Policy Center, just 2 percent of tax returns that reported small business income in 2007 are in the top two income tax brackets, which include all filers with taxable incomes that would be affected.
After President Barack Obama released his budget, which includes provisions allowing the Bush tax cuts to expire for wealthy taxpayers, ABC News' Jake Tapper, CNN's Dana Bash, and Fox News' Sean Hannity advanced the falsehood that those provisions would cause a large percentage of small businesses to pay higher taxes. In fact, according to the Tax Policy Center's table of 2007 tax returns that reported small business income, 481,000 of those returns -- about 2 percent -- are in the top two income tax brackets, which include all filers with taxable incomes that would be affected.
* During the February 26 edition of ABC's World News, Tapper reported, "Almost $1 trillion of the spending, $989 billion, comes from new taxes over the course of the next 10 years, starting in 2011 -- most of them targeted at families earning more than $250,000 a year." Tapper later reported that "President Obama would push an additional $353 billion in new tax hikes on businesses," and aired Sen. Judd Gregg's (R-NH) assertion that, "So, if you've got a restaurant or you have a small business, then you're getting hit now with a tax rate that's gonna jump from 35 percent up to 41 percent," suggesting that all small businesses would face a tax increase under Obama's proposal to let the top marginal income tax rate increase from 35 percent to 39.6 percent as scheduled.
* During the February 26 edition of CNN's Lou Dobbs Tonight, Bash uncritically reported that "couples making $250,000 a year and individuals making $200,000 will see their tax rate go up from 36 percent to 39.6 percent" and that "Republicans standing on the other side of a deep philosophical divide argue it will cripple small business owners."
* During the February 26 edition of his Fox News show, Hannity claimed that "when [Obama] talks about this top 2 percent that he's gonna tax, well, that's 80 percent of small business owners in America."
In fact, as Media Matters for America has repeatedly documented, the Tax Policy Center has estimated that a mere 2 percent of tax returns reporting small business income in 2007 earned enough income to be affected by the expiration of the Bush tax cuts on individuals earning more than $200,000 per year and families earning more than $250,000 per year -- not 80 percent. Neither Tapper nor Bash noted the percentage of small business owners earning enough income to be affected in their reports.
